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IOM Blog

September 6, 2016

The ROI of Employee Engagement

What is employee engagement and why is it so important?

Employee engagement is a term that’s been on the rise. The data houses – Gallup, Bersin, and Deloitte – have been collecting global data about employee engagement for many years.

An ‘engaged’ employee is someone who is willing to go above and beyond his or her job description to serve the interests of the organization, clients, and himself.

What we know is that 21st century employees need more from their work than just a paycheck. They need a sense of connection and community, as well as a personal sense of autonomy, mastery, and purpose.

When you look at the Gallup data, virtually every aspect of an organization that gets measured is impacted by engaged employees or conversely, by non-engaged employees.

What Gallup found from a survey of 1.4 million employees is that the top 25% most engaged teams experienced a double-digit advantage in the following areas:

  • 25% lower turnover (in high-turnover organizations)
  • 65% lower turnover (in low-turnover organizations)
  • 37% lower absenteeism
  • 20% higher customer metrics
  • 21% higher productivity
  • 22% higher profitability

There are a number of factors that influence and impact employee engagement. The two most important factors are the relationship employees have with their direct manager (the person to whom they report) and the relationship they have with their peers or immediate working group.

Good relationships involve trust and understanding. Employees want to feel heard, understood, and appreciated. Strengthening these work relationships requires better, more frequent conversations both between managers and their employees, as well as employees with each other.

One simple way for managers to have consistent, engaging conversations with employees is to spend just 10 minutes a week with each direct report.

In his book The Coaching Habit, Michael Bungay Stanier recommends that managers hold a 10-minute weekly coaching meeting focusing on the employee’s agenda. The following are the essential coaching questions Bungay Stanier recommends:

  1. What’s on your mind?
  2. The AWE question – and what else? (ask this question several times)
  3. What’s the real challenge for you?
  4. What do you want?
  5. How can I help?
  6. What was most useful to you about this conversation?

It’s important to note that you are focusing on what’s important to the employee, rather than what’s important to you. Clients who have adopted this habit have found it to be remarkably informative and a great way to strengthen relationships with their employees.

Are you willing to spend 10 minutes a week to strengthen your relationship with each of your employees? If so, do it consistently for the next four weeks, see what happens, and let me know.

Avatar photo
Susan Katz
Faculty, Institute for Organization Management
CEO, Susan Katz Advantage

Susan Katz is known for helping businesses drive extraordinary growth. As a business growth advisor, Susan helps individuals and organizations align, focus on revenue generating opportunities, and create the strategic changes necessary to achieve unlimited and lasting growth. Susan has worked with a wide range of individuals and organizations including the Better Business Bureau of Maryland, the Baltimore Ravens, Citi Group, Towson University School of Business, and a wide range of service based businesses. Prior to starting her business, Susan was in executive management with two major publishing firms, and responsible for revenue and profit growth throughout most of her career.

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